| Entrepreneurs Buy a Business With One Eye on | | | | have five percent and they would have |
| Selling It -- number ten in a series taken | | | | ninety-five per cent of the ownership |
| from:How to Evaluate and Profit from a | | | | tax-free. This was a great idea.Problems |
| Business Opportunity - The Entrepreneur's | | | | arose when one or two of the children, now |
| GuideEntrepreneurs don't do this because they | | | | grown with families and adult issues of their |
| are in a hurry to sell the business; they do | | | | own shaping their interests, looked at their |
| this because it's a great double check on the | | | | individual holdings in this "family business" |
| value of what they are thinking about buying. | | | | as assets they would like to do something |
| When you change your perspective to selling a | | | | with more in keeping with their own |
| business sometime in the future, you force | | | | priorities. The father, now unable or |
| yourself to think about whether that product | | | | unwilling to raise the cash to buy out those |
| or service will still be demand at that time. | | | | who wanted cash, was forced to sell the |
| Maybe you can see it even more in demand -- | | | | business he envisioned would have been in the |
| maybe less so. If you think it will be less | | | | family for years. Had he formed a family |
| in demand then you need to start thinking | | | | trust and made the trust the eventual owner |
| about how you are going to change the | | | | of the business, then no single person could |
| business, or maybe forget about getting | | | | have forced a decision -- the trust would |
| involved altogether.At the same time you are | | | | have had to act as a unified voice.As the |
| going through this exercise you will be | | | | buyer of a business you should look at the |
| thinking about who will be the likely buyer. | | | | future with realistic eyes and as much |
| Will it be someone like yourself, or will you | | | | imagination as you can bring to the questions |
| have grown the business so that it will be | | | | you see ahead. If the future is strong and |
| beyond the reach of an individual, that it | | | | you are capable you may very well be |
| will be bought by a company or by an | | | | launching a business that someday may be a |
| investment group, or by a wealthy non-owner | | | | great candidate for a public offering. Don't |
| investor. If that's the likely scenario, then | | | | be constrained by what is in place or by your |
| you should be thinking about how you will | | | | own seemingly limited background.Remember -- |
| operate the business. You should give more | | | | management is cause, all else is the |
| thought to operating it as a by-the-book, | | | | result.You will find more about this topic in |
| pay-the-taxes business and not as your | | | | chapter nineteen in my book.The next articles |
| personal cash cow. It takes a lot of | | | | I post will be dealing with making the |
| explaining to get someone to buy into the | | | | business opportunity you buy become |
| fact that the business is worth more than the | | | | successful, I hope you continue to read about |
| books show because you have been taking cash | | | | and profit from what I have learned in my |
| out and not including that money as sales or | | | | thirty-year career as an entrepreneur.By Art |
| that you really don't need all those family | | | | Consoli Consoli held eight corporate |
| members listed on the payroll.Having an idea | | | | positions with Johnson & Johnson before |
| what you might do in the future will help you | | | | starting his first business. He went on to |
| make decisions about the entity you choose to | | | | build over twenty businesses from patents or |
| take ownership or whether you buy or lease | | | | ideas or from businesses others couldn't make |
| assets, or how you structure the relationship | | | | successful. These ranged from starting a |
| with any investors or minority partners you | | | | veterinarian drug company to taking over a |
| might take in. It's always much more | | | | steel fabricating company to developing the |
| difficult to unwind a situation that has | | | | first manufactured home subdivision to |
| become a hurdle than it is to set the | | | | qualify for every private and government |
| relationship up correctly at the | | | | assisted mortgage program in Arizona. He also |
| beginning.Keep in mind no thoughts you come | | | | did ten workouts for lenders and owners; the |
| up with or plans you might hold in your head | | | | last was a $30 million, 300 employee, |
| have to be put in place. It's just better if | | | | precision parts manufacturing plant that made |
| your actions are based on as complete a plan | | | | parts for the auto industry. Consoli's unique |
| as you can envision.For example I know a | | | | background and skills allow him to speak and |
| fellow who bought a business and took title | | | | write about how someone with limited |
| as a Limited Liability Corporation (LLC). He | | | | experience can do a self-evaluation which |
| put in all the money, gave himself ninety | | | | will let him decide which business |
| percent ownership and named himself the | | | | opportunity is best, how to evaluate |
| Managing Member. His named each of his four | | | | opportunities and gain control over the one |
| children as members with two and one-half per | | | | which offers the greatest potential and then |
| cent ownership each. It was his plan to gift | | | | manage that business to success. Readers of |
| each child a percentage of the business each | | | | his book call and write to tell him how much |
| year, to the limits of the tax gift rules, so | | | | his book has helped their lives and improved |
| that at some point in the future he would | | | | their business. |